The Pennsylvania Department of Environmental Protection (DEP) is proposing significant overhauls to the laws governing Marcellus Shale development in the state, including increased protection for water supplies and stricter permitting and operating requirements.
DEP Secretary Michael Krancer recommended changes to the Oil and Gas Act in a May 27 letter to Lt. Gov. Jim Cawley, chairman of the Marcellus Shale Advisory Commission (MSAC), the body Gov. Tom Corbett assembled to report on how to develop the play from both an economic and environmental standpoint (see Shale Daily, April 11; March 29).
The majority of the changes involve measures designed to protect water resources. One proposal would require companies to draft manifests to track hydraulic fracturing wastewater from "cradle to grave" at wells that produce more than 80,000 gallons.
Another proposed change would increase the parameters where an operator is held liable when the cause of a contamination event is uncertain. The current "presumptive liability" is 1,000 feet from a well within six months of drilling, but the DEP would like to increase that to 2,500 feet and one year. The changes would also add well stimulation to the list of activities that could cause an event.
Operators would also be required to notify property owners within 2,500 feet of a proposed well.
The changes would prohibit drilling in a floodplain and within 1,000 feet of a public water supply, and would increase the setback from private water wells to 500 feet from 250 feet, similar to the recommendations of two environmental groups (see Shale Daily, May 13).
Krancer's letter also outlined larger bonding amounts and tougher penalties for violations.
The letter called the current bonding of $2,500 per well, enacted in 1984, "simply insufficient," and endorsed a graduated bonding requirement included in Senate Bill 602. That bill would increase bonding amounts based on the number of wells an operator is drilling.
The revisions would also give the DEP the ability to revoke a well permit, or deny a permit application, if an operator violates state laws or the DEP decides that the company is unwilling or unable to comply with state laws, such as the Oil and Gas Act.
Krancer also called for changes to permitting requirements. The changes would add certain activities -- like construction of a well site and access road, in addition to well operation -- to permits, and would give the DEP permission to allow companies to "adopt" orphaned or abandoned wells. The changes would also allow the DEP to add conditions to permits to protect public resources.
DEP also wants the ability to contract for well control specialists to provide emergency response at well sites. Those contracts would protect the specialists from liabilities if damages occur at the well site and would allow DEP to recover its costs from well operators.
In May Marcellus Shale Coalition President Kathryn Klaber told the MSAC that her members would support "reasonable" updates to the Oil and Gas Act, including changes to bonding, setbacks, presumptive liability and public notification of permit applications. The Marcellus Shale Advisory Commission is scheduled to report to Corbett in July.
Any changes to the Oil and Gas Act would have to be approved by the Pennsylvania General Assembly.